Whisky industry trade body the Scotch Whisky Association (SWA) described the Chancellors near four per cent increase in alcohol duty as “a blow to a vital UK industry”.

The SWA, which had been lobbying for a two per cent reduction in Excise Duty, said the increase will add 36 pence to the average bottle of Scotch whisky, taking the average price to an “onerous 79 per cent”.

The Chancellor stated today the Duty rates on beer, cider, wine and spirits will increase from March 13 in line with the Retail Prices Index (RPI), measured by the ONS in January at 2.6 per cent, and in line with previous forecasts.

However in the supplementary documentation supporting the Budget statement, the Treasury has raised the Duty on a litre of pure alcohol from £27.66 before the Budget to £28.74 from March 13 – a 3.9 per cent increase.

The SWA said the 79 per cent tax rate equates to a £2.15 VAT charge and £8.05 Excise Duty charge on the average 70cl bottle priced at £12.90 as at September 2016, meaning tax on the average bottle now adds up to £10.20.

Duty on spirits is now 21 per cent higher than it was in 2010.

The SWA has now called for a “fundamental review of the alcohol duty system”, claiming the UK now has one of the highest Duty rates in Europe.

It described the latest hike in Duty as “damaging to a major industry” and at odds with the Prime Minister's statement during a visit to Glasgow when she describes Scotch Whisky as “a truly great Scottish and British industry”.

The SWA also warned the duty increase “could undermine the recovery of the UK market for Scotch”.

Julie Hesketh-Laird, acting chief executive of the SWA, said: “A nearly four per cent duty rise and a 79 per cent tax burden on a bottle of whisky is a major blow, reversing recent progress.

“Distillers will find it hard to understand why the Chancellor is penalising a strategically important British industry with this tax increase. “At a time when government should be supporting a key home-grown sector, we face a damaging tax rise on top of the uncertainties of Brexit.

“Looking to the autumn Budget, we will be arguing strongly that it is time for a new approach to excise duty outside the constraints of EU excise law.

“The system is in need of a fundamental review and reform to make it fair and competitive.”